2/20/15…grand ole ‘expiry’ part XXX

TB’s Quote of the Day: “If the members of Congress weren’t milionaires – at least – they might be in favor of raising taxes on the wealthiest…especially since they only come out of there richer!

Bloomberg Quote of the Day: “Whatever you do in life, surround yourself with smart people who’ll argue with you.” – John Wooden – who says???

Overnight Global Markets:

European equity markets lower, this time ex-UK, Asia higher, ex-India, Chinese New Year continues: UK +0.3% vs -0.1% vs -0.3% vs +0.5% vs +0.6%; France -0.8% vs +0.5% vs +0.7% vs +0.3% vs +0.7%; Germany – vs +0.1% vs +0.4% vs -0.1% vs +0.6%; Japan +0.4% vs +0.4% vs +1.2% vs -0.1% vs -0.4%; Hang Seng still closed for Chinese New Year – Gung Hay Fat Choy vs +0.2% vs +0.2% vs +1.1%! Korea also closed for a 3rd day vs +0.2% vs +0.8%; India -0.8% vs +0.5% vs +0.6% vs closed vs +1% vs +1%. U.S. equity futures lower: DOW -28 (range 77); SPX -4.50 (9) NDQ –2.50 (27).

Global Money Markets: Libor: 0.260% 3 mos; 0.385%; 6 mos – both at 2015 highs but still not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.14% – 0.14% is the 9-month high! T-Bills: 0.01%, 1 mo; 0.02%, 3 mos; 0.06% 6 mos; 0.20% 1-yr – 0.25% is the 12-month high! A trader would go insane!

U.S. Treasury Bonds are…rallying??? Options expiry!!! Watch closely today! 10’s 2.08% +5/16; 30’s 2.71% +9/16; Long TIP: 0.78% +15/16. Let us (continue to) pray!

European Bond yields mixed but evn e the losers are only slightly higher: Germany 0.35%! -3; UK 1.78% -4; France 0.67% -3; Italy 1.61% -2; Spain 1.52% -2; Portugal 2.23% -1; Greece 9.61% -3 Volatile!!! Recent range is: 7.03% to 10.98%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.37% -1; low is 0.19%!

Dollar Index slightly higher for a second day, currently 94.65 +.26. Recent low is 93.25 on 2/3. 1/26’s 95.527 was highest since 9/30/03! Euro slightly weaker at 1.1307 -.009, 1.1279 session low! 1/26’s 1.1098 – an 11-year low!!! Sterling 1.5384 –.006. Friday’s high was 1.5440. Bottomed out 1/26 at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen trying to recover at 118.49 –0.40, after trading to 120.48 on 2/12! 1/15’s 115.86 was best since 12/17/14’s 115.57 – weak since peak Oct. ’14: 105.23; recent best 2/4/14 @ 100.76!!! Record: 12/30/11: 75.35!!!

Commodities: Gold trading in a narrow range after Thursday’s minor bounce and is now $1212.20 +$4.60 with support at $1203. Wednesday’s low was $1197.80! The 50 day ($1230) is now first resistance. Silver is DIW at $16.41 +.03. Wednesday’s low was $16.23. Crude trying to come back but feebly and is now $51.62 +.46, with res at the 50 day $51.62, and support at the 40 day $49.91. 2/11’s low was $47.36, lowest since 2/5.

Thursday’s Market Summary:

Two words: ‘options expiration’ today! Perhaps that will put an end to this madness. As Rod Serling would say,“There is a fifth dimension beyond that which is known to man. It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination. It is an area which we call the stock market!!!” Alternatively he might have said, “You are about to enter another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land of imagination. Next stop, the Stock Market!” Therein lies all you need to know to make sense(?) of the markets…

A mixed session with both Nasdaq’s UP 0.4%, Russell 2000 flat, Dow 30, Transports and S&P 500 all off about 0.2%. Dow Utilities which have been suffering were down 1.1% subtracting from Wednesday’s 2.2% gain and well in the red ytd. A/D’s and Breadth were minor and mixed with NYSE faring the worse. The S&P VIX traded in a lower range of 15.10-16.22, slightly narrower than Wednesday. New 52 week highs rose but remain weak while new lows remain stuck – that could end with today’s expiration!

The ytd scoreboard remains volatile (can’t recall ever seeing it this much before): Dow 30 +0.9%; Dow Transports -0.7%; Dow Utilities -2.9%!!! S&P 500 +1.9%; Nasdaq Comp +4.0%; NDQ 100 +4.1%; Russell 2000 +1.9%. NYSE Financials -0.8%: KBW Banks -3.4%; Nasdaq Banks -2.8%. Philly Gold/Silver +8.6%.

Total NYSE Volume slid again to 2nd lowest of 2015 3.2B shares vs 3.34B vs 3.35B vs 3.52B vs 3.78B – ytd low is 2.7B on Jan. 2; while 12/24’s 1.4B shares is the 12-month low. Shares traded on the NYSE floor fell to their lowest level since ½: 693M shares with just 583M at the closing bell vs 730M vs 780m vs 760M vs 803M – 1.22B on 1/30 is highest since 8/8/11!!! – 646M is the ytd low while 12/24’s 349M is the 12-month low…average is 745M shares! Since 1/5 the average is 846M shares and steadily declining! The Dec. average peaked at 979M shares on Dec. 22nd.

Advance/Declines were slightly negative on NYSE and barely positive on Nasdaq: NYSE: -1.1x vs +1.2x vs -1.3x vs +1.7x vs +3.3x! Nasdaq +1.1x vs +1.1x vs +1.3x vs +1.8x vs +2.4x. Breadth was similar: NYSE -1.5x vs +1:1 vs +1.3x vs +1.9x vs +5x!!! Nasdaq +1.2x vs +1.1x vs +2x vs +2x vs +2.7x. New 52 Week Highs rose to 290 vs 238 vs 297 vs 346 vs 325 vs 186 vs 148 vs 108 – their range for the last 12 mos. is 39-612!!! New Lows stable at a WEAK 45 vs 45 vs 39 vs 41 vs 37 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX slightly lower again but still bearish at 15.30 -.15, from Monday’s 1owest since 12/26, and back above the 200 day (14.65). Range: 15.44-16.74. The recent high is 12/16’s 25.20, second only to 10/17’s (31.06!) – highest since 11/2/11!!! Average of the past 12 months is 14.61, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market still can’t catch a bid. That’s one up day in the past 9 sessions since setting new low yields on 2/4 on Greece: 10’s 2.11% -5/16 (1.64% low yield); 30’s 2.74% -9/16 (2.22% low); Long TIP 0.82% +1/16 (0.49% low!).

Gold recovered somewhat from Wednesday’s $1197.80, lowest since 1/5, and closed at $1213.40 +$13.20. It peaked at $1307.80 on 1/22. $1130.40 is the current 12-month low! 7/17’s session high was $1346.60, highest since March 19th!!! RESISTANCE is the 50 day, $1230, the 40 day $1235, then the 200 day at $1250. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver treaded water in a tight range with a high of $16.77 before closing at $16.37 -.10. The 200 day ($18.32) is resistance with res at the 50 day, $16.80, and the 40 day, $16.87. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude sold off again but it wasn’t the magnitude but the low that was significant: $49.15! It finally closed at $51.06 -.98. This after plummeting to $47.36 last Wednesday, lowest since 2/5, negating the Greece rally. 1/28’s low was $44.08, lowest since 3/09. $50-52 is again resistance. 12/17’s high was $58.98. Consider: 10/25/14’s high was $84.83. There have been 64!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13, and it is off 59% since then! The record high of $147.27 was on 9/30/08. Res is again the 50 day ($51.62), with support at the 40 day ($49.91), and major res at the 200 day ($82.84). The range is $43.58-$112.24 since 3/1/12. Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!). Recall TB’s prediction of a bounce at $43.83? WILL it test that $32.40 March ’09 low?…by the way, the decline from the 9/20/08 high to the low took EXACTLY 6 months – we are now in the 9th month of decline!!!

For a four day week it was one wild ride…right Mr. Toad? Hold on to your hats and money today for options expiration, then get out of here!!! Enjoy the weekend!

TB

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2 Comments »

  1. LDH said

    TB, love the Rod Serling idea!

    • traderbill said

      Thanks, LDH, couldn’t stop myself!

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